Metrus Energy & Energy Efficiency as a Service

Transcription

1 Metrus Energy & Energy Efficiency as a Service

2 Metrus Energy What We Do Metrus develops, owns and operates largescale EE projects for Commercial, Institutional, and Industrial clients nationwide Metrus partners with leading ESCOs/contractors to design, construct, maintain projects Metrus is an energy efficiency independent power producer selling efficiency as a service Metrus operates projects with Fortune 500 companies and major institutional customers

3 Advent of Efficiency As-a-Resource PURPA/QFs (onsite Cogen) Resource Acquisition, Utility DSM Programs Energy Performance Contracting (EPC) Independent Power Producers (IPPs) Late 1970s PURPA fostered efficiency in energy production by encouraging non-utility generation and the use of cogeneration and smaller scale renewables Utility demand side management (DSM) programs purchased (acquired) energy efficiency savings via financial incentives and technical assistance ESCOs industry emerges to serve DSM programs; state and federal programs coupled with international M&V protocols spur growth in EPC financing Deregulation in mid-1990s opens up the generation market for IPPs that sell power via long-term power purchase agreements (PPAs)

4 Emergence of Efficiency as-a-service Solar PPAs 2005 EE ESAs 2010 PPAs drive growth of small scale (250 kw and up) solar PV systems End-users start to buy solar power and not solar panels Efficiency Service Agreements (ESAs) build on solar PPAs to fund efficiency retrofits and kick off the era of energy efficiency (EE) as-a-service

5 Comprehensive Solutions Low High As-a-Service Landscape in Clean Energy Equipment + Ongoing Services + Lease Financing ESCOs with Performance Guarantee EE ESAs or Solar PPAs Equipment + Ongoing Services 3 rd Party Utility Programs Equipment Sales M&V and Software Fixed Payment Pay-for-Performance Variable Payment

6 Origins of the Metrus ESA Power Purchase Agreement Wind turbine/farm Utility power plant Solar PV System Traditional Performance Contract Efficiency Services Agreement Funds 100% of project costs Third-party ownership of CHP and other efficiency assets Pay-for-performance structure Covers Construction, O&M and M&V Private sector focus C&I, Institutional Federal/Municipal Institutional K-!2, Public Universities

7 ESA Defines the Relationships Two key contracts govern each project: 1. Efficiency Services Agreement ( ESA ) with Customer; 2. Efficiency Services Performance Contract ( ESPC ) with ESCO Customer Project Installation ESCO designs and installs the project, provides longterm maintenance and guarantees performance ESA Metrus funds 100% of project cost Repayment based on realized savings Metrus takes title to EE equipment Metrus pays for maintenance costs ESCO ESPC Turnkey project installation and maintenance contract

8 Key Benefits Financial No capital outlay (cap-ex dollars can be invested in core business) Immediate positive cash flow through energy and water savings Pay-for-performance ESA de-risks projects Incorporates all available utility incentives Preservation of debt capacity Operational Key equipment upgrades that increase resiliency and reliability Improved efficiency of building operations and systems Ongoing maintenance and monitoring services Flexibility to add on new upgrades

9 Cost per Unit of Energy ESA Service Charge Service Charge = (physical units of savings) * (Service Rate, $/unit) + Non-Energy Savings $0.20 Billing Period Quarterly $0.15 SAVINGS Basis Quantity of energy units saved (e.g., kwh of electricity) $0.10 Service Charge $ per unit of energy units saved $0.05 Non-Energy Savings % of project savings attributed to operational (non-energy) benefits $ Annual Escalation Service charge escalates at a fixed annual rate Savings created by: (1) Year 1 service charge is avoided utility cost (2) Fixed annual escalation is expected utility rate increase

10 ESA Compared to Alternative Financing Options Attribute ESA Lease PACE Cash Down Payment No No No Yes Origination Fees No Yes Yes No On Balance Sheet No Yes Yes Yes Pay-for- Performance Yes No No No O&M Yes No No No M&V Yes No No No Funding Amount 100% 100% 100% 100% Tenor or Term 5-15 years 5-15 years 20 years N/A Interest Rate No service agreement Yes lease payments No tax assessment N/A Liens No No Yes N/A

11 Lessons Learned Selling EE as-a-service Trade kilowatts for negawatts Truly selling efficiency-as-a-service requires pricing efficiency service on a pay-for-performance basis Monitor and measure Selling as-a-service requires accurate project monitoring Offer a flexible platform Provide an open platform for customers Bundle upgrades Combine electric and thermal efficiency upgrades in projects Mitigate risks (1) Charge only for realized savings, (2) reduce downtime by providing ongoing maintenance services Finance, save & repeat Add or substitute efficiency measures to existing projects Look beyond energy savings Developing projects that include water efficiency and other operational savings